Corporation Tax

Corporation Tax is the tax that UK companies and some other organisations pay on their profits. Our specialist accountants cover all aspects of corporation tax that your business might need.

Get Started

What is corporation tax?

Corporation tax is payable by limited companies (and some other businesses) on the company profits and other gains from selling assets such as land, property, or shares. 

The current rate of corporation tax is 19% – 25%, payable on your taxable profits and dependent on the level of profits made within the accounting period, as well as the number of associated companies that you may have. 

How to pay corporation tax

You need to register for corporation tax within three months of starting to trade, when you set up as a limited company. It’s important to note that ‘trading’ can be classed as any business activity from buying stock to putting out an advert, it doesn’t need to include earning money.  

Therefore, you should make sure you register to pay corporation tax as soon as possible when starting your business to avoid being hit with a penalty. HMRC accepts various payment methods for corporation tax. However, some will take longer than others so be sure to leave enough time if your deadline is close. 

You can pay online or via telephone banking using Faster Payments and the payment will go through either same day or next day. Another option for same day payment is CHAPS, as long as it is set up within normal bank opening hours. If paying by BACS, it will likely take around three working days to clear.

When is corporation tax due?

If your taxable profits are £1.5m or less, you will need to pay your corporation tax within nine months and one day after then end of your accounting period ending. If your taxable profits are more than £1.5m, you will pay your tax in instalments.

Remember, the deadline for paying corporation tax comes before the deadline for filing your tax return (which is 12 months after the end of your accounting period). This means that you will need to get your company tax return ready well in advance of the deadline, so you know how much corporation tax you are going to have to pay.

How we can help you

Jan McDermott Chartered Accountants specialise in managing corporation tax matters for their clients. Their experienced and professional service will make sure you have more time and less stress to focus on the other important parts of your business. 

Get A Free Quote

Frequently Asked Questions

Yes, there are ways you can lower your corporation tax bill.  Firstly we will make sure that you are claiming all of your allowable expenses. Also, if you meet the qualifying criteria there are a number of  range of reliefs available that can reduce your overall CT bill including:

  • Research and development tax relief
  • The Patent Box
  • Production of certain create media (e.g., films, TV, and video games) 
  • Any losses your company makes 
  • Disincorporation (if your business alters its structure to sole trader or partnership and needs to move assets to shareholders)

It’s just as important to know what doesn’t qualify for relief as what does. The main items that aren’t eligible for tax relief are: 

  • Depreciation of assets 
  • Movements in general provisions 
  • Entertaining clients and suppliers 
  • Remuneration not paid within 9 months of the end of the period
  • Items not incurred “wholly and exclusively for the purposes of the trade, profession or vocation”

Alan Robson

They provide us with a fully outsourced finance function so that our own team can focus on our business. They implemented Xero software from day one of the company meaning that we have real-time visibility of our business at all times, The monthly management accounts meetings we have with Jan really add value to decision-making and strategic planning and we wouldn’t be without them.

Peter Broxton

Their professionalism, expertise and client care are outstanding and they have supported our growing business no end. They look after everything from our bookkeeping, VAT, annual accounts, as well as claiming Research & Development tax relief, preparing budgets and forecasts and assisting with grant claims. The whole team are always responsive, friendly and reliable and we wouldn’t hesitate to recommend them to anyone looking for a trustworthy and efficient firm to look after their business finance requirements.

Scott Hackett

I moved my accounts over to Jan at the beginning of the year and have been extremely impressed with her attention to detail and precision. She’s made it easy for me to understand and manage all the key aspects of my accountancy, as well as offering useful suggestions of ways to improve and make things work more efficiently for me and my business. I’d highly recommend Jan and her team to anyone looking for professional, friendly, and reliable accountants that truly get to know you and offer a tailored service.”

Alistair Evans

Jan McDermott & Co have been our accountants for over 15 years and have not only ensured our accounting records are accurate and legal, but also provided us with first class advice to help us grow. They recommended our move to Xero accounting software which has revolutionised our business, allowing us to create predictable income through the use of Go Cardless Direct Debits, and streamlining our day to day accounting operations. Jan and her team are friendly,  easy to work with and take time to understand a particular problem or situation. I wouldn’t hesitate to recommend them to any business that wants an accountancy firm they can grow with and depend on.